Question

Is there a trade-off between economic development and environmental sustainability?

Answer 1

Instructions:

• We will approach this answer in three steps.
• We will first try to define a trade-off.
• Then, we will try to find if there is indeed a trade-off between economic development and environmental sustainibility and discuss the way forward.

Solution:
Let us first define a trade-off. A trade-off refers to a situation regarding allocation of scarce resources between two commodities.

In a trade-off, making a choice for one good comes at the cost of foregoing the consumption of the other good.

For example; Imagine you have 50 Rupees. You have to decide between having ice-cream or chocolate. Whatever you decide, choosing one good comes at the cost of foregoing the other good. Meaning, you can 50 rupees worth of ice-cream. But then, you chose to forego chocolate.

Suppose you decide to have 25 rupees worth of ice-cream and the rest for chocolate. Even then, if you had chosen not to have ice-cream, you could have had 50 rupees worth of chocolate.

What I am saying is that our choices have a cost. Whenever we choose something, we incur the cost of foregoing something. Our lives are full of trade-offs. Having more of one thing potentially results in having less of another. We can’t have more of both.

Similarly, countries that chose economic growth in the past decades incurred costs such as environmental degredation, depletion of natural resources (forests, minerals and mines), pollution, etc.

Disasters triggered by weather and climate related hazards, were resposible for thousands of deaths and losses of billions of dollars. As a deteriorating environment dampened a country’s economic growth, it was believed that economic growth came at the cost of protecting the environment or vice-versa.

This environmental degredation had serious implications on the well-being of people and thus affected economic development.

Thus, it was felt that there was a trade-off between economic growth and environmental sustainability. It was felt that protecting the environment came at the cost of economic slowdown (decrease in growth rate).

However, with the emergence of new clean technologies (such as renewable sources of energy, green transportation, electric motors), that are also cost competitive (cheaper than conventional technologies), it is now believed that sustained economic development is dependent on environmental protection.

Thus, there is no trade-off between economic growth and environmental sustainability.